11 February 2021

Regular onshore formalities for offshore companies which are now subjected to regular on.....

As you may know the offshore (profit) tax regime has been abolished in 2020. Most former offshore companies will in principle be subject to the regular tax regime as of 1 January 2020. Due to this transition, we hereinafter will inform you about the filing obligations and other formalities which are different from those under the offshore tax regime.

 

The electronic filing of tax returns

In connection with the modernization of the Tax Authorities, as of the fiscal book year 2020 all taxpayers must file all tax returns, including the provisional and final profit tax return, through the online portal of the Tax Authorities. As of the book year no exceptions are applicable.

The first step in this process is to create an account in the online portal. Additional information and documents will be requested to open this account.

 

The profit tax return procedure

As a result of the transition to the regular regime, the filing obligation changes as follows.

  • Provisional profit tax return

A provisional profit tax return must be filed within 3 months after the end of the book year (for example before 1 April 2021 if the book year ends on 31 December 2020). If the provisional tax return is not filed within the 3 months period, a request for extension, see below, will not be granted and a penalty for late filing could be imposed.

  • Final profit tax return

The provisional tax return will be formalized through the filing of the final profit tax return. The final return in principle should be filed within 6 months after the end of the book year (for example before 1 July 2021 if the book year ends on 31 December 2020). Any difference between the tax due based on the provisional tax return and the tax due based on the final return should be paid when filing the final tax return.

  • Request for extension of time on the due date for filing

The final tax return should be filed within 6 months after the end of the book year. However, a request for extension of time on the due date for filing the final tax return can be submitted. This request should also be filed within the 6 months after the end of the book year. If an extension of time is granted, the final return must be filed within 12 months after the end of the book year (for example on 31 December 2021 at the latest if the book year ends on 31 December 2020).

However, please be informed that the request for extension of time on the due date for filing may not be granted if the outstanding offshore profit tax returns (including 2019) are not yet filed before 1 July 2021.

 

Penalties

  • Penalties-filing obligations

If a tax return is not filed or is not filed in time, the Tax Inspector can impose a tax assessment which can also include a penalty. The maximum penalty amounts to ANG 2,500.

If in a later stage the profit tax due based on a tax return appears to be too low, the Tax Inspector can impose an additional assessment with a penalty. This penalty can amount 25% up to 100% of the additional tax due.

  • Penalties-late payment profit tax due

If the tax due according to the filed tax return is not (or not completely) paid in time a maximum penalty of ANG 10,000 can be imposed.

Should you have any questions on the above, please contact us via +599 9 430 0000 or send us an email at info@cw.gt.com